Question

JOURNAL ENTRIES OF:

January 3	Employees are paid monthly on the first business day of the month for work done in the previous month. (Ignore payroll taxes for this assignment.) Accounting wrote and distributed the paychecks.
	GBI received $60,000 in safety product inventory and $40,000 in raw materials from Dallas Bike Basics. This inventory was ordered on December 28. The payment terms for the invoice total of $100,000 are net 10 days. GBI paid the CWX shipping company $1400 with a manual check for the shipment of the goods base on the weight. The bill of lading showed that the safety product inventory arrived in 5 boxes with an average weight of 40 lbs per box. and the raw materials came on a pallet and weighed 300 lbs.
	Windy City Bikes in Chicago, IL ordered $22,500 of bicycle accessories from GBI. The cost of the accessories (to GBI) is $15,000. The goods were shipped to Windy City immediately via UPS using Windy City’s UPS shipping number. The terms of payment for Windy City’s order are 3/10 net 30 days.
January 7	GBI received payment of $24,000 from Northwest Bikes in Seattle, WA for the balance due on their account.
January 10	GBI’s account on the utility company website is updated at the end of each month when the meter is read. GBI uses this data to accrue the expenses at the end of each month (in this case on December 31st.) This allows recognition of the expense in the correct period. Expenses are usually accrued at the end of the month as “Accrued Expenses”. GBI paid the December utility bill via the company’s automatic electronic bill pay program.
	GBI’s advertisement in the English language edition of Italian Cycling Journal was published today. This ad was prepaid at the end of August for six months of advertising, September through February, (Four months of advertising have already been used.)

Answer 1

Wherever amount is not given I have put *** in amounts place.

Date	Particulars	Debit	Credit
Jan-03	Salaries Expenses	***
	Salaries Payable		***
	(To record salaries expenses due but not paid)
Jan-03	Inventory A/c	$1,00,000.00
	Accounts Payable A/c		$1,00,000.00
	(To record raw material purchased on account)
Jan-03	Shipping Cost	$1,400.00
	Bank		$1,400.00
	(To record amount paid for shipping)
Jan-03	Accounts Receivable	$22,500.00
	Sales		$22,500.00
	(To record sales to Windy)
Jan-07	Bank A/c	$24,000.00
	Accounts Receivable		$24,000.00
	(To record receipt of payment from debtor)
Jan-10	Accrued Expenses	***
	Bank A/c		***
	(To record cash paid for utility)